How big can a bootstrapper be?
Stefan Topfer CEO and Chairman of WinWeb gives this plug to the beginning of Jason Holden's new series, Small is the New Big.
Stefan's a great supporter of bootstrapping and has some posts on the subject.
But both articles started me wondering about how small bootstrapped business needs to be.
A couple of thoughts:
• Companies as large as Microsoft and Dell started as bootstrapped businesses and grew with cash flow to become major players.
• Even computer giants like Apple had their humble beginnings and Steve Jobs reputedly bootstrapped the launch of Macintosh and later Pixar with revenue from existing enterprises.
• Greg Gianforte, founder of RightNow Technologies, insists he's not convinced there's any size limitation on bootstrapped companies or any point at which they must raise outside investment in this interview with Forbes.com.
• This said, bootstrapping is certainly about building capabilities and doing so often without a lot of money to start, so clearly starting small is what bootstrapping is all about.
• If your idea is too big to be bootstrapped all at once you can practice scalability in reverse breaking your concept into smaller pieces and then adding on as you increase cash flow for growth.
Other observations? Please ad them in the comment section below or link here from your blog and I'll return the favor.
January 7th, 2008 at 12:39 am
Shawn,
You are so right, bootstrapping allows your business to grow, with the big difference, that you grow with your own money out of your own efforts.
This means you do not push your business to a size unsustainable by incoming business, giving you time to get it right and grow some more.
Stefan
January 7th, 2008 at 3:30 am
Thanks for your comments, Stefan. I think there’s also an issue of sustainability here. As a previous post linked to earlier here has suggested, bootstrapping requires income, head count (or number of employees)marketing and product quality to increase in pace, but it seems to me that bootstrapping itself will sort of force you into this model eventually. This would be a very different approach than heavily funding (externally) an expansion and knowing only after two or three years (when you are out of money or have no customers or both) that you made a big mistake.
January 9th, 2008 at 2:52 am
Thanks for the mention Shawn.
Bootstrapping as Stefan rightly says allows you to grow without external shareholders providing funding and taking a big slice of your business.
If you are a success then it may be that you go down the route to which you refer, but as Stefan says you don’t have to be the next Dell or Microsoft, but hey if you were would you really mind, after all, what a ride!
January 9th, 2008 at 3:47 am
Big or small, bootstrapping will help you keep control of what you create. Thanks for the comment, Jason.
December 22nd, 2010 at 8:53 am
jou